Answer:
- 2024, 4%: $5.45
- 2030, 4%: $6.90
- 2024, 11%: $8.06
- 2030, 11%: $15.08
Step-by-step explanation:
You want the estimated prices of a $4.31 meal 6 and 12 years after 2018 for inflation rates of 4% and 11%.
Future value
The future value of the mean is given by ...
FV = P(1 +r)^t
where P is the current price, r is the inflation rate, and t is the number of years.
In this problem, P = 4.31, r is one of 0.04 or 0.11, and t is one of 6 or 12. Then, for example, the price in 2030 at 11% will be ...
FV = 4.31(1+0.11)^12 ≈ 15.08
The prices of interest are ...
- 2024, 4%: $5.45
- 2030, 4%: $6.90
- 2024, 11%: $8.06
- 2030, 11%: $15.08
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Additional comment
For repetitive calculations like this, it is convenient to use a calculator or spreadsheet.
